China’s premier tells German CEOs biggest risk is lack of cooperation

By Christina Amann, Alexander Hübner and Patricia Weiss

BERLIN/MUNICH/FRANKFURT (Reuters) -China’s Premier Li Qiang told Germany’s top CEOs that a lack of cooperation was the biggest risk during a visit to lobby for stronger ties even as Europe seeks to reduce its dependence on Asia’s rising superpower.

Li met with the heads of corporate titans like Mercedes-Benz, SAP and Siemens Energy on Monday in Berlin ahead of Chinese-German government consultations on Tuesday at the start of his first official trip overseas.

German blue-chips Covestro, BASF and Merck also confirmed that their CEOs had been present at the meeting, but declined to provide details on what was discussed.

Covestro said it was in favour of keeping ties with China stable, adding it saw the continuation of economic and technological relations as being in the interest of Germany and the EU despite growing geopolitical tensions.

“This requires a balanced approach to opportunities and risks as well as close cooperation on global challenges such as climate change. This can only be achieved through constant dialogue,” the company said in e-mailed comments.

The premier will also head to Paris for an official visit and to attend a financial conference on June 22 to 23.

“We should not artificially exaggerate ‘dependence’, or even simply equate interdependence with insecurity,” he told Germany’s top corporate brass according to the official Xinhua news agency.

“Lack of cooperation is the biggest risk, and lack of development is the biggest insecurity.”

The fact his first trip overseas started in Germany underscores the weight of the ties between Asia and Europe’s largest economies. China is Germany’s largest trade partner and is a key market for German companies to export goods and procure materials.

The trip comes, however, as the European Union seeks to reduce its dependence on China, particularly for critical minerals and products required for its green transition, and Russia’s invasion of Ukraine has made it more wary about letting rivals have access to technologies with military applications.

The European Commission will present a document later on Tuesday that will call for measures to address security risks posed by outbound investments as well as to reinforce export controls on goods that have both civilian and military use.

Germany itself is mulling a new China strategy expected to toughen its stance on its top trade partner. It is also reviewing the use of equipment by Chinese telecoms equipment maker Huawei in its digital infrastructure.

China hawks said Li would likely push German companies to lobby the government to restrain regulation on business with China at national and EU level.

Companies, not governments, should take the lead on managing risk, Li told the German CEOs.

“Enterprises have the most direct and acute sense of risk, and know how to avoid and deal with it, so we should return the leadership of risk prevention to enterprises,” he said.

After government consultations on Tuesday morning, Li is set to attend the German-China business forum this afternoon, before heading in the evening to Munich.

A spokesperson for Siemens confirmed that the Chinese delegation would meet with Siemens CEO Roland Busch for a brief visit in Munich on Wednesday. The Munich tour will also include luxury carmaker BMW and its CEO Oliver Zipse, two people will knowledge of the plans said. BMW owns a majority in BMW Brilliance Automotive (BBA), its Chinese joint venture with Brilliance Auto Group.

(Reporting by Sarah Marsh, Andreas Rinke and Christina Amann in Berlin; Christoph Steitz in Frankfurt; Alexander Huebner in Munich; Ethan Wang and John Geddie in Beiing; Editing by Christina Fincher)